Written by Steve Van Beek
Last Tuesday, the CFPB filed suit against Utah-based Castle & Cooke Mortgage LLC alleging the payment of bonuses to loan officers who steered consumers into mortgages with higher interest rates. Here is from the CFPB's press release:
"The CFPB alleges that the company violated the rule with its quarterly bonus program, which paid more than 150 Castle & Cooke loan officers greater bonus compensation when they persuaded consumers to take on more expensive loans. The average quarterly bonus ranged from $6,100 to $8,700. By contrast, those loan officers who did not charge consumers higher interest rates did not receive quarterly bonuses. The CFPB estimates that more than 1,100 illegal quarterly bonuses were paid and that tens of thousands of customers may have been upsold since April 2011. By tying bonuses to the interest rate of the loans in this manner, the CFPB alleges that Castle & Cooke was in direct violation of the law."
Below are a few resources you might find useful.
Kaufman & Canoles. A recent creditunions.com by attorneys at Kaufman & Canoles discusses Recent Court Rulings that May Impact Credit Unions. Additional information can be found in Kaufman & Canoles' Summer 2013 Credit Union Legal Update.
Weltman, Weinberg & Reis. Rob Rutkowski has started a video series on the CFPB's mortgage regulations over at That Credit Union Blog. You can find the first three videos here: Part 1; Part 2; and Part 3.